STI Entering Bear?

The move from STI today is rather disappointing. It started with an agressive climb of over 30 points in the morning and gradually recline back to below the 2,398 mark @ 2,386. After the morning star yesterday comes the shooting star, creating confusion to my chart read. I will have to revise my reading of STI.

Today marks the crossing of 21 days to 89 days EMA. Giving further signs of weakness. However, this may not mean the STI officially entering bear due to the 21 days EMA's volatility. If 55 days crosses 89 days EMA from the top, it would be the first time they meet since 2003, at the begining of the bull run. The MACD on the other hand, has been showing divergence to STI, still supporting the notion that a reversal upward is near.

The RSI although having a divergence indicating possible up trend soon, is coming back down, probably with higher lows. This may not mean that STI will not go down further, but increasing possibility of uptrend after that. As I have recorded on previous note, we have a support at 2,355. While seeing the latest gap as exhaustion, the gap measurement still points towards this level.

It is therefore possible that STI will still go down, likelihood with a congestion at 2,355 before reversing itself. Close monitoring is needed for the next few days and tomorrow needs to be an up trend to break the pattern for Shooting Star.

While I was worrying about the volume, I also realize that although it has not support the recent up trend. It has in general not supporting this down trend. The volume has been diverging with the downward movement. It has now reduced to almost bare minimum, which I recalled one forumer's comment as pathetic. Therefore we may see stronger wave upward, soon.

After all these said, what is my feeling for STI. The weekly is clear with the down move for this week, which STI daily has fulfilled. The volume is deminishing with the whole trend, with the lack of support, STI will rebound. We may still see some southward movement but I feel that it is limited as STI would enter a congestion period, supported at 2,355. The resistance level now is 2,398 which I feel is a strong level and STI needs increasing volume to break through, same with 2,451.

If however STI moves northward tomorrow crossing the shooting star, I feel that it would be a very positive sign.